On Tuesday, Deutsche Bank (ETR:DBKGn) adjusted its price target on shares of Melia Hotels International SA (BME:MEL:SM) (OTC: SMIZF), increasing it to EUR7.50 from the previous EUR7.00 while retaining a Hold rating on the stock. The adjustment follows the hotel group's financial performance for the first nine months of the year.
Melia Hotels reported a 9-month revenue of EUR1.544.1 million, a 4.5% increase, which was nearly aligned with the market consensus of EUR1.545 million. The company's EBITDA rose by 10.8% to EUR428.6 million, outperforming consensus expectations by 1.2%. This improvement in earnings was attributed to operational optimization, which also led to a margin increase of 160 basis points compared to the same period in the previous year, reaching 27.8%.
The net result for the company was particularly strong, showing a 23.7% increase to EUR118.6 million. This figure surpassed the consensus forecast of EUR114.01 million by 3.9%. The positive financial outcomes were supported by Melia Hotels' efforts to reduce its debt.
In the third quarter, Melia took significant steps to strengthen its financial position by cutting its debt by approximately EUR60 million. By the end of September, the company's net debt, calculated before the application of IFRS-16 accounting standards, stood at EUR832.2 million. This reduction in debt underscores the company's commitment to improving its balance sheet and financial health.
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